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Russia's financial system is being hit from this morning with something far from a normal set of sanctions, and better seen as a form of economic war.
It is the deployment of of heavy weaponry in a financial theatre of war. And it is designed to push the whole of Russia in to as deep a recession as possible, with the added chaos of bank runs.
It could exact from Russia an immediate price in terms of its financial and social stability for the invasion and bombardment of Ukraine, and bring that home to the Russian people, and anyone in the Russian elite harbouring doubts about their President's actions.
Targeting a central bank of a G20 nation is unprecedented. In the words of the European Commission, it is intended "to paralyse" the ability of the Russian Central Bank to defend the Russian financial system from sanctions.
As the White House said explicitly: "We are planning to impose measures to ensure Russia cannot use its Central Bank to support its currency and undermine the impact of our sanctions". As the Foreign Secretary Liz Truss said, the allies are "doing all we can to degrade the Russian economy".
Central banks normally have sovereign immunity. The targeting of the Russian Central Bank is occurring explicitly in order to disarm the Russian state's $630bn war chest of defences. On the day of invasion, interventions using these reserves helped rescue the rouble after it slumped to a record low against the dollar.
Former Russian Prime Minister Mikhail Kasyanov wrote on Twitter that the West was "freezing Russia's international reserves" by targeting the central bank.
"There is nothing more to support the rouble. Turn on the printing press. Hyperinflation and economic catastrophe are just around the corner," he added.
These measures make the rouble a one-way downward bet in today's currency markets. The exclusion of the top Russian domestic retail banks from the Swift messaging system at the same time creates some domestic uncertainty. The Russian Central Bank had to reassure the public and the markets that it had unlimited roubles to ensure stability of the system. There are risks that the market fallout will spread beyond Russia.
But it is a unique weapon, designed for a unique situation. Nations representing half the world's economy, using many levers of financial might against one representing 2% of the world economy, while keeping energy exports flowing and nuclear weapons in bunkers.
